Wednesday, September 21, 2016

ABB to Divest Cable Business to NKT Cables

Complementary strengths to create a leading player in the cable industry

ABB and NKT Cables sign agreement for long-term strategic partnership

The sale has a total enterprise value of EUR 836m (US$934m)

Sale demonstrates ABB’s commitment to active portfolio management

(BUSINESS WIRE)-- NKT
Cables is acquiring ABB’s global high-voltage cable system business with
a total enterprise value of 836 million euros (US$934 million). High
voltage cables are key components in sustainable energy networks, used
for transmitting large amounts of electricity over long distances. The
business is part of ABB’s Power Grids division, which is currently
undergoing a strategic review.
NKT Cables designs, manufactures and supplies power cables for low-,
medium- and high-voltage solutions mainly in the Alternating Current
(AC)-area. It has major production facilities in Europe and China as
well as sales offices around the world, and employs around 3,200 people.
In 2015, revenue was 1.2 billion euros.
“We are combining two strong cable portfolios rooted in a shared
Nordic heritage that will be more competitive on a larger scale under
NKT Cables’ ownership, while maintaining access to supply through a
long-term strategic partnership,” said ABB CEO Ulrich Spiesshofer. “The
combination of our niche cable system business with the strength of NKT
Cables demonstrates our commitment to active portfolio management, a key
element of our Next Level strategy.”
ABB’s high-voltage cable technology and manufacturing as well as
service footprint is highly complementary with NKT Cables’ activities,
making the combined business ideally suited to serve the rising global
demand for long-distance power transmission cable systems. The combined
operational scale and reach of the two businesses is expected to lead to
even better service for global customers.
“ABB’s high-voltage cable business will add considerable strength to
our portfolio and bring us a world-class manufacturing operation. We
will leverage the technology, domain competence and highly skilled
workforce to grow this business,” said Michael Hedegaard Lyng, President
and CEO of NKT Cables. “We look forward to ramping up our long-term
partnership that will serve future projects all around the world.”
ABB’s cable system business offers turnkey solutions including
design, engineering, supply, installation, commissioning and service. It
had adjusted standalone revenues of US$524 million in 2015, employs
around 900 people, and has state-of-the art manufacturing and R&D
capabilities for high-voltage submarine and underground cables in
Karlskrona, Sweden. The transfer of assets also includes a new,
cutting-edge cable-laying vessel, currently under construction. With
experience of over a century, the business serves a range of
applications and has commissioned hundreds of alternating current and
direct current links around the world.
“As part of the strategic partnership, ABB and NKT Cables will work
together on future projects to access market opportunities in areas like
sub-sea interconnections and Direct Current (DC) transmission links”,
said Claudio Facchin, president of ABB’s Power Grids division. “This
transaction will simplify and focus the Power Grids portfolio.”
The transaction is anticipated to close in Q1 2017, subject to
regulatory clearances and fulfilment of the closing conditions. Goldman
Sachs acted as exclusive financial advisor to ABB and Freshfields
Bruckhaus Deringer as legal advisor.
ABB will report on the progress of its Next Level strategy, including
the strategic portfolio review of its Power Grids division, at its
upcoming Capital Markets Day on October 4, 2016.
ABB (www.abb.com)
is a leading global technology company in power and automation that
enables utility, industry, and transport and infrastructure customers to
improve their performance while lowering environmental impact. The ABB
Group of companies operates in more than 100 countries and employs about
135,000 people.
Important notice about forward-looking information
This press release includes forward-looking information and
statements. These statements are based on current expectations,
estimates and projections and are generally identifiable by statements
containing words such as “expects,” “believes,” “estimates,” “targets,”
“plans,”, “anticipates”, “is likely” or similar expressions. However,
there are many risks and uncertainties, many of which are beyond our
control, that could cause our actual results to differ materially from
the forward-looking information and statements made in this press
release including such factors as may be discussed from time to time in
ABB Ltd’s filings with the U.S. Securities and Exchange Commission,
including its Annual Reports on Form 20-F. Although ABB Ltd believes
that its expectations reflected in any such forward-looking statement
are based upon reasonable assumptions, it can give no assurance that
those expectations will be achieved.